Data

RIAA mid-year stats: 10% growth in US recorded-music market


Tags:

US industry body the RIAA has published its mid-year figures for 2018, outlining the growth in recorded-music revenues in the first half of this year.

Retail spending on recorded-music grew by 10% year-on-year to $4.6bn, while wholesale revenues (after the cut taken by digital services) also grew by 10%, to $3.1bn.

Streaming now accounts for 75% of retail recorded-music revenues in the US: the category grew by 28% year-on-year to $3.4bn in the first six months of 2018.

Within that, paid subscription revenues grew by 33% to $2.55bn, including $354m from ‘limited-tier’ subscriptions like Amazon’s Prime Music and Pandora Plus, which have limits on their catalogue or ability to play tracks on demand.

The average number of paying music subscribers in the US in the first half of this year was 46.4 million, up from 31.5 million in the first half of 2017. Note: this isn’t the figure at the end of June, but rather an average across the six months.

You can see the impact of family plans and limited-tier services here: the number of subscribers grew by 47.3%, but the revenues from those subscriptions grew by 33%.

Even so, streaming services are adding more than a million net new subscribers a month in the US, which is an encouraging statistic. And streaming subscriptions are now 55.4% of US recorded-music retail revenues, which is a notable tipping point.

Meanwhile, ad-supported, on-demand streams generated $368.8m of revenues in the US in the first half of this year, up by 21.4%. That’s a category that includes Spotify’s free tier as well as YouTube and Vevo.

As for older formats, physical sales in the US were down by 25% in the first half of this year to $462m, including a 41% plummet in CD sales and a 13% increase in vinyl sales. Download revenues fell by 27%, meanwhile, to $562m – “the lowest level in more than a decade” according to the RIAA. Physical is now just 10% of the US recorded-music market by retail value, while downloads are just 12%.

Synchronization royalties, meanwhile, grew by 10.8% to $131m in the first half of this year. Spare a thought for anyone still in the ringtones business though: sales of those fell by 35.3% to $12.7m.

The big picture is double-digit growth for the US recorded-music market once again, although there’s a talking point around the slowdown in the rate of that growth.

Overall retail and wholesale revenues were up by 10% year-on-year in the first half of 2018, but in the first half of 2017 their YoY growth was 17% and 14.6% respectively. Meanwhile, the first half of 2018’s 28% growth in streaming revenues compares to 48% in the first half of 2017.

(The flipside to this: a third consecutive year of double-digit growth is encouraging, and the rate of decline of physical sales has accelerated, so that’s one drag on the impact of streaming’s growth.)

In his introduction to the mid-year figures, RIAA president Mitch Glazier stressed the positives of the music industry’s “comeback story”, noting that “a business growing again, driven by a competitive paid streaming market, means new investments in more artists and more music”.

But we’re now familiar with these kinds of figures being accompanied by warnings about the ‘value gap’ and the need for licensing/copyright reforms. Glazier addressed those topics too.

“We also recognize that the growth achieved so far is in spite of our music licensing system, not because of it. That’s not how it should work. Fortunately, a bipartisan bill, the Music Modernization Act, is edging closer to final Congressional enactment,” he wrote.

“The elements included in that bill close some of the most glaring loopholes in our licensing laws, but it is not a comprehensive reform that ensures all artists earn fair market rates on all platforms. We still have much work to do.”

Stuart Dredge

Read More: Data News
Leave a Reply

(All fields required)